US mortgage rates hit record lows

The average 30-year fixed rate mortgage in the US fell back to a record low of 3.49 percent this week as the 15-year rate hit a new record low.

Government sponsored mortgage buyer Freddie Mac confirmed that 30-year rates had returned to their all-time record low level this week as the average 15-year rate established a new record low of 2.77 per cent.

The results follow the announcement by the Federal Reserve chairman Ben Bernanke that an aggressive policy of mortgage-backed securities purchases, at a rate of $40bn (£25bn) a month, is being pursued in order to drive a housing market recovery.

Freddie Mac vice president and chief economist Frank Nothaft says: “Following the Federal Reserve’s announcement of a new bond purchase plan, yields on mortgage-backed securities fell bringing average fixed mortgage rates to their all-time record lows which should aid in the ongoing housing recovery.

“New construction on one-family homes rebounded in August, rising by 5.5 per cent to the fastest pace since April 2010. In addition, existing home sales increased by 7.8 per cent in August to its strongest pace since May 2010.”